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How IRS firings are expected to screw up tax season

How IRS firings are expected to screw up tax season

Yahoo21-02-2025

The IRS terminated probationary workers this week, claiming those let go weren't "critical" to tax filing season.
The IRS has already been understaffed in recent years, resulting in delays in processing tax returns and customer service.
One expert said there's no way to cut a substantial number of workers without impacting filing season.
Your tax return may languish on an empty desk at the Internal Revenue Service this season after the agency began firing workers this week.
An internal IRS email viewed by Business Insider said the agency would terminate probationary workers — typically those who have been at the agency for less than a year — who were not "critical" to tax filing season.
Tax experts and IRS employees told BI they expect the terminations to result in delayed tax refunds, slower customer service, and a backlog in paperwork processing. Some spoke to BI under the condition of anonymity.
Natasha Sarin, a professor at Yale Law School, told BI that there's "no way, in the middle of filing season, to cut a substantial number of IRS employees without having an impact on filing season," adding it's an "all hands on deck" time at the IRS.
Many Americans still file paper tax returns, a human resources worker at the IRS said, adding, "If there's not anyone there to process them, it's just going to be sitting."
A former Treasury official likened it to a business "eliminating your entire accounts receivable department," adding, "No business would say we have no interest in collecting the revenue that's due to us."
The IRS and DOGE did not immediately respond to a request for comment. Kevin Hassett, director of the White House National Economic Council, told reporters on Thursday that the estimated 3,500 firings "is a small number and probably you can get bigger, especially as we improve the IT at the IRS." He also said that not all IRS employees working on taxes were "fully occupied."
In the wake of the pandemic, the underfunded and understaffed IRS struggled with a backlog of millions of returns, taking months to process them and causing economic hardship for taxpayers.
Sarin, who served as counselor to previous Treasury Secretary Janet Yellen, said that the terminations could throw the IRS back into the "dark ages." Taxpayers should be concerned about whether they'll be able to get in touch with the IRS, whether refunds will be processed in a timely manner, and if the IRS website will malfunction during tax season.
A fired IRS worker said that "the long-term ramifications of this will be felt for decades."
"There will continue to be processing delays due to incredibly outdated systems, and there will not be supported free filing for Americans due to budget cuts and lobbying by major tax software players," the worker said.
"It's just going to slow the IRS down," one IRS worker who still has a job at the agency said, adding, "It's a shame that all the progress is going to reverse."
They're referencing increased funding from the Biden administration's Inflation Reduction Act, which was meant to mitigate staffing issues. Bolstered by IRA funding, hiring at the IRS in recent months focused on tax evasion and fraud detection staff.
Vanessa Williamson, senior fellow in Governance Studies at Brookings Institution and the Urban-Brookings Tax Policy Center, said during a press call on Thursday that the expected terminations could "disproportionately affect enforcement."
"When you underpay and understaff the IRS, the agency doesn't have the power or the resources it needs to go after wealthy tax evaders with their high-priced lawyers," Williamson said.
"It's going to be incredibly harmful to efficiency at the IRS," the former Treasury official told BI. If the agency can't keep up with existing efficiency programs — like using AI to target audits better — compliance will be less effective, they said.
Over the past couple of weeks, a range of federal agencies have fired their probationary employees as part of President Donald Trump's efforts to slash government spending by reducing the federal workforce. BI previously spoke to over half a dozen fired workers at agencies, including the US Department of Agriculture and the Department of Energy, who said they're planning to fight their terminations.
"We're not going to take this lying down," Melanie Mattox Green, a fired US Forest Service worker, told BI. "We all love our work and we're planning on fighting and getting our jobs back."
The IRS HR employee said that these terminations, coupled with the federal hiring freeze, could put the IRS behind on its functions into next year.
"If you have filed, or will file a tax return, you are going to feel an impact," they said.
Are you a federal worker with a story or information to share? Contact these reporters via Signal at madisonhoff.06, julianakaplan.33, and asheffey.97, or via email at asheffey@businessinsider.com, jkaplan@businessinsider.com and mhoff@businessinsider.com.
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The days around Trump's trade war announcements saw spikes in lawmaker stock market transactions

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Ukraine's defense industry says the fight against Russia has shown it that the West's approach to weapons is all wrong
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Ukraine's defense industry says the fight against Russia has shown it that the West's approach to weapons is all wrong

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He said that the expensive weapons like the US military's M982 Excalibur guided munition (each shell costs $100,000) "don't work" when the other side has electronic warfare systems and the kind of traditional artillery rounds that are 30 times cheaper. Goncharov pointed to the M107, a self-propelled gun that was first fielded by the US in the 1960s, as an example of inexpensive firepower that can be effective in large numbers. "You don't need 10 Archers from the Swedish that are probably one of the best artillery systems in the world," he said, referring to the artillery system made by BAE Systems that was given to Ukraine by Sweden. Instead, you need 200 cheap howitzers like the Bohdana one that Ukraine makes. The "enormous rate of damage," the significant rate of ammo and equipment attrition, in a fight like this means you need a constant supply of weaponry to keep fighting, especially when there isn't any guarantee the high-end weapons will be the game changers promised. Russia's grinding attritional warfare Russia's invasion of Ukraine has been one marked by extensive use of artillery and tremendous ammunition expenditure. The war in some ways resembes the huge, destructive battles of World War I and World War II, with high casualties and substantial equipment losses. Russia has one of the world's largest militaries backed by a large population. The country has repeatedly demonstrated a willingness to pursue an attritional style of warfare, committing a lot of troops and weaponry to a fight to slowly wear down its foe. Russia's invasion has chewed through equipment. The UK Ministry of Defense said in December that Russia had lost over 3,600 main battle tanks and almost 8,000 armored vehicles since the full-scale invasion began in February 2022. The Russians have the mass to absorb those losses. Ukraine has struggled with weapon and ammo shortages, as well as deficiencies in manpower. Ukraine turned to small, cheap drones as an asymmetric warfare alternative; Russia has employed uncrewed systems in battle as well. China, another concern in the West, has built a similar kind of force, one with the mass to take losses. The West, on the other hand, has spent the last two decades and change fighting lower-level adversaries where its forces can win the day with superior capabilities. European and NATO are waking up Goncharov's warning is one that has been echoed by other Western defense officials and companies. Countries have been keen to learn lessons about fighting Russia from the conflict in Ukraine, particularly in Europe, where many countries warn Russia could pursue further aggression in the future and defense spending is growing rapidly. Gabrielius Landsbergis, the former defense minister of Lithuania, a NATO ally bordering Russia, previously described the war to Business Insider as one of "high quantities." 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He said it wasn't about getting rid of the expensive weaponry completely, but about finding a balance. It's about "getting speed and enough quality done in the right conjunction." That's something warfare experts have also told BI. Michael O'Hanlon, a senior fellow and the director of research in the foreign-policy program at the Brookings Institution, said the West's approach needs to change. The American military, for instance, is far more used to wars where "the whole point is you're not going to be slogging it out for months and years on end." But he also said that doesn't mean the West needs to completely abandon the development of advanced systems. "Those things have not become unimportant just because we realized that other things are also important," he said. The UK's armed forces minister also warned last month that the war showed the West needs to change how it procures weaponry. Luke Pollard said Ukraine's fight showed NATO "the way we have run our militaries, the way we have run our defense, is outdated." He said NATO militaries "build and procure really expensive high-end bits of kit. And it will take you five, 10 years: five years to run a procurement challenge, another 10 years to build it." Industry has taken note, too. Kuldar Väärsi, the CEO of Milrem Robotics, an autonomous unmanned ground vehicle company in NATO ally Estonia, told BI in May that "we need to learn from Ukraine, and we need to get more pragmatic about what kind of equipment we buy." He said Europe needs to learn that "having a hundred more simple pieces of equipment is better than having 10 very sophisticated pieces of equipment." He said countries need to start buying less-sophisticated pieces of weaponry en masse so industry can adjust. "Industry has to manufacture what the customer is buying. And if the customer is still buying only a few very sophisticated items, then the industry just aligns with that." And the reality is that may not work.

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